25 March 2019 — News
Picture today’s audit and accountancy profession as standing on the edge of a mountain. The mountain is real, and it is called digitalisation. “We have to face it. It’s just a question of deciding how quick and easy we want this journey to be,” says Thomas Thoomse Smith, Project Director at the UK’s Financial Reporting Council Lab.
He views the digitalised future as having an increasing variety and quantity of data. This will be much more than the financial information that many of today’s auditors and accountants can handle. It will include data on the environmental footprint of a company or its human resources.
“Where does the root of the word ‘auditor’ come from? It comes from the words ‘hearing’ and ‘listening’. Hearing the financial story of a business is one aspect. Listening to the wider information around a business is another thing,” explains Thomas.
Thomas sees a clear, necessary direction for the profession: “We need a significant evolution of the role of accountant and auditor. We’ve got to expand on our current expertise and skills to be able to create value from these new forms of information. Including data on the environment or consumers will give us important insights into a business.”
“Digital Day 2018 talked about the ‘expectation gap’ – the gap between what people think our profession does and what it actually does. A lot of the potential services we could offer in the future sit within that gap. For example, around wider forms of assurance – being the third-party trust provider for everything from AI systems to blockchain.”
In Thomas’ view, walking away isn’t an option. “We have to evolve our skills and mindset to work out how to make the best use of new, non-financial data, or it’s going to call into question the very role of accountants and auditors. Our clients are already starting to use artificial intelligence and other digital technologies. They need us to be competent and comfortable with it too.”
How can the profession climb the digital mountain?
He has a clear idea of how to seize lasting value from digitialisation: “We need to quickly evolve to become multi-skilled professionals. At our core, we are experts in our profession and its standards. Layered around this core, will be a very wide skill set, which will understand a business while considering its human capital, climate metrics and data technology.”
“As you gain more expertise via professional development, you start to create overlapping layers of skills. This is where you start to get the ideas that can lead to impressive developments and innovations, leading to new services and value.”